Coincidentally…
Ennostar (3714.TT), the parent company of LED producer Epistar (pvt) and Lextar (pvt), has indicated that Epistar has been at full, utilization concerning its Mini-LED production capacity since May and expects to remain so through the end of the year. The company is targeting ~30% of its revenue from Mini-LEDs this year and has yet to decide on the implementation of a planned capacity increase dedicated to that product line. At the same time it has also been indicated upstream that Apple (AAPL) has begun volume production on its new MacBook Pro, which is expected to include a Mini-LED backlight, with a target level of between 600,000 and 800,000 units/month over the next four months. With Epistar one of the companies developing Micro-Led and Mini-LED technology at Apple’s ‘secret’ factory in Taiwan, it does seem coincidental that Epistar is seeing such strong demand through the end of the year for Mini-LED product. We can’t make the assumption that Epistar is a/the Mini-LED supplier for the MacBook unless direct evidence is shown, but it seems to walk like a duck.
As an aside, the management of Ennostar responded to reports that tablet producers would be shifting displays from LCD to OLED next year, which would imply lower demand for LED backlight suppliers as OLED displays are self-emissive and therefore do not require backlighting. The company response was that yield rates for OLED tablet displays were low and would therefore be expensive and thus would only be used for small sized tablets where the yield would be higher. This would leave the high-end tablet market open to Mini-LED backlighting.
They cited the opposite for TVs, where OLED panels would remain the choice for high-end large TVs, while Mini-LED backlighting would be used for smaller LCD TVs. While this sounds a bit self-serving it does make sense at least for the near-term, but as OLED panel producers gain experience in producing IT product panels, those yields will improve and costs will decrease. Mini-LED costs will also have to decrease to broaden their ability to compete directly with OLED, so the cost comparisons that are being cited today will likely look quite different in a year. We expect Mini-LED prices will decline a bit faster than IT panel OLED displays but not because of issues with OLED production but because of the limited number of producers as compared to the number of possible Mini-LED suppliers. There will certainly be some price push from Chinese OLED suppliers who are trying to break Samsung Display’s (pvt) strangle hold on the OLED space, but SDC has the advantage of both experience and a large captive customer.
As an aside, the management of Ennostar responded to reports that tablet producers would be shifting displays from LCD to OLED next year, which would imply lower demand for LED backlight suppliers as OLED displays are self-emissive and therefore do not require backlighting. The company response was that yield rates for OLED tablet displays were low and would therefore be expensive and thus would only be used for small sized tablets where the yield would be higher. This would leave the high-end tablet market open to Mini-LED backlighting.
They cited the opposite for TVs, where OLED panels would remain the choice for high-end large TVs, while Mini-LED backlighting would be used for smaller LCD TVs. While this sounds a bit self-serving it does make sense at least for the near-term, but as OLED panel producers gain experience in producing IT product panels, those yields will improve and costs will decrease. Mini-LED costs will also have to decrease to broaden their ability to compete directly with OLED, so the cost comparisons that are being cited today will likely look quite different in a year. We expect Mini-LED prices will decline a bit faster than IT panel OLED displays but not because of issues with OLED production but because of the limited number of producers as compared to the number of possible Mini-LED suppliers. There will certainly be some price push from Chinese OLED suppliers who are trying to break Samsung Display’s (pvt) strangle hold on the OLED space, but SDC has the advantage of both experience and a large captive customer.
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